Rand weakens for fifth straight day

Currencies / 1 August 2014, 11:08am

Reuters

Johannesburg - The rand weakened against the dollar on Friday for a fifth consecutive day, falling by close to a third of a percent, as the currency struggled to shake off fundamental economic weakness.

Data released in the previous session showed South Africa's trade deficit for June had narrowed from 7.4 billion rand to 19 million rand with exports edging up slightly, but the rand failed to gain a foothold against a strengthening dollar.

At 08:27 SA time the local unit was 0.28 percent softer, trading at 10.7365 per dollar compared to a New York close of 10.7060.

Although the trade deficit narrowed, the latest reading brought the cumulative deficit for 2014 to 48.27 billion rand compared with 35.57 billion rand over the same period in 2013.

“This is bad news on top of other disappointing economic data,” NKC economist Christie Viljoen said in a morning note.

“July's trade report will not encourage much optimism either due to impact of National Union of Metalworkers of South Africa (Numsa) strike.”

The strike lasted four weeks and hit the operations of major automobile makers as well as construction of two badly-needed power plants.

Government bonds were flat, with yields on the 2015 paper and the longer-dated 2026 paper unmoved, at 6.17 percent and 8.31 percent respectively. - Reuters